EPFO Pension scheme: Supreme Court extends joining deadline for employees by 4 months

The Supreme Court on Friday gave relief to several employees who were not able to join the Employees Pension Scheme by extending the deadline for the same by four months. 

The order was passed by the Bench of Chief Justice of India Uday Umesh Lalit, Justice Aniruddha Bose and Justice Sudhanshu Dhulia on a batch of petitions filed by the Employees Provident Fund Organisation (EPFO), challenging the judgements delivered by the High Courts of Kerala, Rajasthan and Delhi, which had quashed the Employee’s Pension (Amendment) Scheme, 2014.

On August 11 this year, the Bench had reserved its verdict in the case, after conducting hearing for six days.

The Apex Court decided to extend the deadline, after observing that there was lack of clarity regarding the cut-off date in view of the High Court judgements invalidating the provisions of the Employee’s Pension (Amendment) Scheme, 2014.

Further, the top court of the country held the condition in the 2014 scheme as ultra vires, which mandated the employees to make a further contribution at the rate of 1.16 percent on the salary exceeding Rs 15,000. 

The part of the verdict, which held the condition to make additional contribution on the salary exceeding the threshold limit as invalid, however, has been kept in suspension for six months, to enable the authorities to generate funds.

The Apex Court also upheld the verdict given by a Division Bench in R.C. Gupta vs Regional Provident Fund Commissioner case, ruling that there cannot be a cut-off date to avail the benefit of option under the scheme.

The Supreme Court ruled that the employees who exercised option under provision 11 (3) of the scheme and continue to be in service as on September 1, 2014, will be guided by the amended provisions of 11(4) of the scheme.

It further held that the members of the scheme who did not exercise option under provision 11(4) before the 2014 Amendment, would be entitled to exercise option under 11(4) of the post amendment scheme. 

The top court of the country noted that the right of such employees to exercise option before September 1, 2014, was clearly defined in the RC Gupta case. 

It said the scheme as it stood before 2014 did not provide for any cut-off date and thus, those members shall be entitled to exercise option in terms of paragraph 11(4) of the scheme as it stands at present. Their option shall be in the nature of joint option covered in pre amended para 11(3) and para 11(4), it added. 

Stating that there was uncertainty regarding the validity of the post amendment scheme, the Apex Court ruled that the employees who were entitled to exercise the option, but could not do so due to the cut-off date, ought to be given certain adjustments.

It extended the time to exercise option under para 11(4) of the scheme under the circumstances by four months.

(Case title: EPFO vs Sunil Kumar and ors)